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Well...a proxy server on your local network could improve performance because it caches the web pages and sends them to you over your LAN instead of re-downloading it from the net. But in this case....the proxy server is located on the Internet, so even i the pages were cached, they would still have to pulled across the Internet link. Removing the proxy in this case would reduce latency.

A proxy server can provide a good level of security, but there is only one problem...you do not have control over it. If you had your own proxy, i would say it is a good ideas, but since it is the iSP's proxy. Better off without it...